August was the strongest month in two years for business activity in the Eurozone according to Markit’s latest Eurozone Purchasing Managers Index adding to hopes that the region is on its way to making a sustainable economic recovery.

The Markit Composite PMI rose to 51.5 last month as orders increased for the first time since mid 2011, the figure beat July’s reading of 50.5. Any figure above 50 indicates growth. The positive data will be welcome news to European Central Bank policymakers who this week are set to decide on interest rates.

Despite the positive data the Euro softened against the Pound and other peers as investors were not happy that the figure was revised down from the estimated figure of 51.7. The downward revision was a reminder that any European recovery is still very vulnerable.

Markit also reported that the main factor behind the faster expanding output was a growth in new order inflows in August for the first time since July 2011. However, job losses were reported for the twentieth consecutive month. Composite output for Germany was reported at a 7-month high at 53.5, while France’s output fell in August to 48.8.

“The Eurozone recovery is looking increasingly broad-based, with more sectors and more countries emerging from recession. Although the picture is improving, the survey is still consistent with only very modest economic growth,” said Chris Williamson, chief economist at Markit.

Other data released on Wednesday showed that the Eurozone’s economy expanded by 0.3% in the second quarter of the year after strong exports and increased spending by governments and households dragged the region out of recession. A softening of austerity policies also helped. Despite the positive figure the Eurozone is expected to contract again in the third quarter. On a year-by-year basis the region’s economy contracted by 0.5%.

“We do not interpret a second consecutive solid gain as the start of a strong upturn,” said Christoph Weil, an economist at Commerzbank. “After all, the imbalances in the periphery have yet to be fully corrected and several core countries are increasingly facing problems,” he said in a report.

Euro (EUR) Exchange Rates

As of 10:30 am

The Euro/US Dollar Exchange Rate is currently in the region of: 1.3167 <

The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8449 <

The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4400 <

The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6736 <